At The Tokarz Group Advisers (TTGA), we keep the window of opportunity wide open and depend upon a well-developed proprietary pipeline as well as our own strong industry relationships to find great opportunities no matter what types of businesses they are. From a financial criteria perspective, we generally look at lower middle-market companies with revenues of $10 to $150 million.
The companies we consider adding to a portfolio must, first and foremost, have strong management teams, a history of positive cash flow/predictable profit margins and conservative valuation multiples relative to growth. But beyond these fundamentals, we look for niche companies in industries with a favorable competitive landscape. In other words, it’s unlikely we would be interested in a commodity business with little differentiation in the marketplace. We would, however, be inclined to invest in a company that experiences relatively slow growth but owns a large share of the market.
While TTGA has expertise across a wide range of industries, we also know when it’s necessary to call in outside experts to advise us about industry nuances. Their input further refines our due diligence process and allows us to develop a well-rounded portfolio. Thus, the industries we focus on include: